Depending on your negotiation skills and your willingness to take the time, you can get free debt settlement by doing all the work yourself. If; however, you don't feel confident to negotiate with creditors or you don't have the time, you may want to hire a debt settlement company. Although they charge a fee, they may be able to get you a much higher chargeoff percentage that will offset the fee.
One other reason to hire a legit debt settlement company, is because some creditors don't care to discuss settlements with people who owe them money. By getting a debt settlement company to represent you, your creditors know they are dealing with experience and may be more eager to settle.
You also must remember credit card companies will only settle if they believe that it is in their best interests. This means if they think they can still get the money from you that you owe; either through normal payments or through legal action, they won't quickly and easily agree to a settlement. If you are a legitimate candidate for a Chapter 7 Bankruptcy, they will likely be much more willing to write off a large portion of your debt than if your stable relatively high income will require you to file a Chapter 13.
First they're going to examine how you've been keeping up with your credit card payments and they will review your credit report to see if you are behind on other bills. If you're only behind on credit card payments, they may be less likely to negotiate. Some lenders will go so far as to require a complete financial statement so they can get a better picture of your so-called financial hardship.
If you opt for do-it-yourself, free debt settlement, before you pick up the phone to call your credit card company to negotiate, you first need to come up with a payoff amount proposal. Since you decided to go it alone, you'll need to come up with the full payoff cash, because most creditors will require a lump sum. Some may agree to short term monthly payments over a three to six month period, but expect to make an immediate payoff. Some debt settlement companies can help you arrange/negotiate a payment plan.
Make no mistakes... Whatever settlement you agree to, you cannot backout because you realize a debt settlement company could get you a higher chargeoff. Once you agree, you're stuck with the deal and you'd better be ready to pay up.
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How much you can settle for largely depends on each company's policy. If you don't have any idea what you should be asking for, a good rule of thumb is to ask for all late fees, over the limit charges and interest charges to be taken from the account. This should remove between 30-45% of your balance. If the creditor isn't willing to do this, then a settlement isn't to your advantage.
When attempting do-it-yourself credit card debt settlement, be sure to keep detailed records. You want the date and time you called, who you spoke with and a log of the conversation. Remember, most calls are recorded but if you don't have this information and there is a dispute later, supervisors may not be able to determine what was actually promised.
Before sending in your payoff money first make sure you get a letter from the creditor stating that the account will be paid in full under the agreed upon terms. Otherwise, after you send in the payment it will simply be added to what you owe, and you'll still be pursued for the remaining balance.
Ultimately, knowledge and skill are key. Credit card companies are banking on you being inexperienced and ignorant of laws. This may be another reason for you to consider hiring a debt settlement company.
More free credit card debt settlement tips
- Credit card debt - Free help to get out of credit card debt and tips on how to avoid debt.
- Credit counseling versus debt settlement - Decide which alternative is the best option for you.
- Debt negotiation sample letter - Do It Yourself debt settlement.
- Free debt settlement - Do It Yourself debt settlement to negotiate lower bills.
- Sample Debt Settlement and Negotiation Letter
- Sample Credit Card Dispute Letter
Get Out of Credit Card Debt Tips:
* Get a total amount for all the debts you owe and set a goal to eliminate debts.
*Review all late fees and interest rates on debts, make sure to avoid any extra fees.
* Calculate how many months it will taketo eliminate debts making your payment amounts.
* Record dates that debts are due on a calendar and pay before late fees are added.
* Make a budget, stop spending money, track spending habits to determine areas of waste.
* Pay more than the minimum due on debts every month or make extra payments each week.
*If you owe $10,000 or more consider contacting a credit counselor, a debt settlement company or other debt reliefprofessional.
* Consider using the equity in your home for a loan to pay off all debts andrepay the loan fast.
*Review credit card fees, balance transferring balances onto one, low interest rate card.
* Prioritize debtfrom greatest to least amount owed and pay off the smallest debt first.
* Review interest rates and fees on debts,pay down the debt with the highest fees first.
* Stop trying to live like the rich, budget your money, don't spend more than you make.
* File away credit cards with high balances until they are paid in full.
* Only use one, low interest credit card, and pay it off as soon as possible.
*Negotiate with lenders for a lower pay off, it can have a negative effect on creditreports.
* Get a second job,earn extra money by babysitting, doing yard work, or other jobs.